Institutional Stablecoins: Four Regulatory Regimes Compared

A regulated institution buying USD Coin (USDC) in Frankfurt and a regulated institution buying USDC in New York are not buying the same instrument. The ticker is identical. The price is a dollar in both places. The website is the same. The claim is not.

In the European Economic Area (EEA), USDC is issued by Circle Internet Financial Europe SAS, a French-authorised electronic money institution. Under MiCA, EEA holders can redeem USDC directly through this French entity. Outside the EEA, the issuer is Circle Internet Financial, LLC. One ticker, several issuers, several supervisors, several reserve structures, several redemption counterparties.

This is not a curiosity for corporate structuring. It is the operational form of an objection the Bank for International Settlements pressed in its 2026 Annual Economic Report, which assessed stablecoins against the tests of singleness, elasticity, interoperability and integrity and found them wanting on each. Singleness means that a dollar should always be worth one dollar, regardless of which issuer’s stablecoin represents it. The BIS has compared this idea to the different banknotes issued by private banks in the nineteenth century.

The market spent five years asking whether stablecoins are backed. Regulators have now largely answered that. Four major frameworks require full reserve backing, high-quality liquid assets, segregation and enforceable redemption. What none of them answers on its own is the question a bank’s investment committee has to sign off: can this institution acquire this token, hold it with this custodian, on this network, transfer it to that counterparty, and convert it back into fiat inside the window its treasury function requires, under the law of every jurisdiction in which it operates?

That question is not about the token. It is about the route. This article is about how the route is built, and where it breaks.

Aggregate stablecoin supply moved above $300 billion during August 2026 on DeFiLlama data, up from $269.4 billion a year earlier. The put the market at roughly $320 billion at the end of May 2026, with more than 99% of it denominated in US dollars.

Figure 1: Global Stablecoin Market Capitalisation, 2020 to 2026

Source: DeFiLlama, AMINA Bank analysis. Data cut-off: 26 August 2026.

Three structural features matter more than the headline number.

1. Stablecoin Concentration

Tether and Circle together account for roughly 82% of outstanding supply, USDT at about 59% and USDC at about 23%. The regulated institutional products that dominate industry discussion sit far below that. Ripple reported $2.1 billion of RLUSD in circulation on 26 August 2026, and Paxos’ USDG was under $3.3 billion on the same date. Each is well under 1% of the market. For institutions, regulation is only part of the decision. Smaller stablecoins may offer stronger regulatory safeguards but have less liquidity, which can make large trades harder to execute.

In one jurisdiction that trade-off inverts, which is the more instructive case. Tether didn’t pursue ane-money token authorisation under MiCA, objecting among other things to the reserve deposit requirement. Licensed venues responded in sequence: Coinbase moved first in December 2024, Crypto.com followed in January 2025, and Binance and Kraken completed the process by the end of March 2025. No MiCA-licensed exchange in the EEA now offers USDT spot pairs. Kaiko data recorded USDT volume on EU venues falling more than 70% between the fourth quarter of 2024 and the second quarter of 2025 while USDC volume on the same venues nearly doubled. Inside the European regulated perimeter, the deepest token in the world is not the illiquid choice. It is not a choice at all.

2. Stablecoin supply has decoupled from the crypto price cycle

Stablecoin supply fell more than 30% in the previous bear market and has held near record levels through the 2026 drawdown. Adjusted quarterly volume across all networks surpassed $4 trillion for the first time in Q1 2026, according to a16z data. Stablecoin balances staying relatively steady during market downturns can indicate growing use for transactions beyond trading.

However, these figures should be treated with some caution. Estimates of total stablecoin transfer volume in 2025 range from about $28 trillion according to BIS to more than $62 trillion according to BCG and Allium, depending on the source and methodology. After removing bot activity, internal transfers and exchange rebalancing, estimates of actual real-world payments are much lower; in the low hundreds of billions.

The payments thesis is directionally sound and an order of magnitude smaller than headline volume implies. Institutions building capacity assumptions off gross transfer data are sizing for a market that does not exist yet.

3. Stablecoin Usage

The third feature is that none of the above may help an institution evaluate whether it can actually use the asset. That depends on a sequence of separate permissions, each with a different owner.

Figure 2: Institutional Stablecoin Lifecycle

Source: AMINA Bank analysis.

Figure 2 sets out the seven stages a regulated institution is likely to pass through, and it is worth being precise about why each is a separate approval rather than a step in one decision.

• Issuance determines the legal claim.
• Acquisition determines whether the institution faces the issuer directly or a venue, which changes its counterparty.
• Custody determines whether the institution can hold that specific token on that specific network.
• Financial crime controls must extend across the full transaction lifecycle.
• Settlement is the use case.
• Redemption is where the claim is enforced.
• The fiat leg is where the banking system decides how long that takes.

An institution can clear six stages and fail the seventh, and that failure is not theoretical. A stablecoin can hold its peg while a custodian suspends transfers on a network. An issuer can remain solvent while a blockchain halts. Reserves can be fully backed and independently attested while a correspondent banking relationship pushes fiat settlement past the point at which the treasury desk needed the money.

The March 2023 failure of Silicon Valley Bank is the clearest precedent. Approximately $3.3 billion of Circle’s USDC reserves were temporarily inaccessible, and the token traded roughly 12% below par over the following weekend, without any deficiency in the total reserve. These are distinct failure modes with distinct owners, and the price chart shows none of them until they have already happened. is the clearest precedent: approximately $3.3 billion of Circle’s USDC reserves were temporarily inaccessible, and the token traded roughly 12% below par over the following weekend, without any deficiency in the total reserve. These are distinct failure modes with distinct owners, and the price chart shows none of them until they have already happened.

Figure 3: Market Capitalisation of Leading Stablecoins, 2020 to 2026

Source: DeFiLlama, AMINA Bank analysis. Data cut-off: 26 August 2026.

The United States, European Union, United Kingdom and Singapore have converged on principle: full backing, high-quality liquid reserves, segregation from the issuer’s estate, enforceable redemption, and financial crime controls.

Figure 4: Four stablecoin regulatory regimes and what they require of institutions

Sources: OCC notice of proposed rulemaking under the GENIUS Act; MiCA Titles III and IV; Bank of England policy statement and draft Code of Practice, and the Bank of England and FCA joint approach document; MAS stablecoin regulatory framework; AMINA Bank analysis.

Disclaimer: Figure 4 provides a high-level summary of selected regulatory frameworks as of August 2026 and is intended for educational purposes only. Regulatory requirements, implementation timelines, supervisory guidance and proposed rules may change. Certain entries summarise complex legal provisions and should not be relied upon as a substitute for the underlying legislation, regulatory guidance or legal advice. Readers should review the relevant primary sources and assess their specific circumstances before making operational, compliance or risk-management decisions.

Read the redemption row across. An institution holding a systemic sterling stablecoin may expect convertibility by end of day. An institution holding a stablecoin issued under the MAS framework may face a five-business day window. Under the OCC’s proposal, a US permitted issuer may redeem within two business days, extendable to seven calendar days where redemption requests exceed 10% of outstanding issuance in any 24-hour period. Those are different treasury instruments.

A cash management desk that models them all as redeemable at par has mispriced its own liquidity, and the stress-case extension is the number that matters, because it applies precisely when the money is needed.

The GENIUS Act was signed on 18 July 2025 and created a federal category, the permitted payment stablecoin issuer, that did not previously exist. Implementation has been slower and more granular than the headline suggests, and the detail is where institutional risk sits.

The sequencing is worth stating accurately, because it is often reported backwards.

1. The FDIC issued the first agency-specific rulemaking in December 2025, proposing an application process for subsidiaries of FDIC-supervised insured depository institutions.
2. The OCC followed with the comprehensive proposal: its notice of proposed rulemaking was issued on 25 February 2026 and published in the Federal Register on 2 March, establishing a new 12 CFR Part 15 covering applications, permitted activities, reserves, redemption, capital, risk management and custody, with conforming amendments to Parts 3, 6, 8 and 19.
3. The OCC’s own bulletin confirms that Bank Secrecy Act, anti-money laundering and sanctions requirements are reserved for a separate rulemaking coordinated with the Treasury.
4. The Federal Reserve and NCUA have not yet issued implementing regulations.

The proposal asks more than 200 questions for public comment, which is a fair proxy for how much remains open. It would restrict permitted issuers to eight enumerated activities, impose quantitative reserve diversification and concentration limits, require weekly confidential and quarterly public reporting, and oblige issuers to hold an operational liquidity backstop sized on the previous twelve months of operating expenses and recalculated quarterly.

The operative date is the earlier of 18 January 2027 or 120 days after final rules are issued. For an institution building a US stablecoin capability now, the perimeter is legible but the detail is unsettled, and integrations built against proposed rules carry rework risk that should be budgeted rather than assumed away.

RLUSD is an example of a stablecoin designed with institutional requirements in mind from the start. It is issued by Standard Custody & Trust Company under a New York Department of Financial Services trust charter, with reserves held in segregated accounts. BNY was appointed as the primary reserve custodian in July 2025, and monthly third-party attestations are published. For institutional redemptions, RLUSD is transferred to a redemption wallet, followed by compliance checks and fiat settlement into the customer’s bank account.

That sequence, rather than the charter, is the operationally relevant disclosure. Redeemable at par does not mean instant, and for a corporate treasurer the length and reliability of the sequence is the product. Very few issuers document it at that level of granularity.

MiCA is the most frequently misdescribed of the four regimes, and the error is consequential.

Analysis of institutional stablecoins under MiCA routinely cites the asset-referenced token rules: the reserve of assets, segregation from the issuer’s estate, and the permanent right of redemption under Article 39. Those provisions are real, and they do not govern the tokens institutions actually use. A stablecoin referencing a single official currency is an electronic money token. EMTs sit under Title IV, not Title III.

The distinction changes the answer to every material question.

• Under Article 48, an EMT may only be offered by an issuer authorised as a credit institution or an electronic money institution, which excludes the trust company and money transmitter structures common in the United States.
• Article 49 grants holders an unconditional right of redemption at par, at any time.
• Article 50 prohibits the granting of interest.
• Article 54 requires that at least 30% of funds received is always deposited in separate accounts at credit institutions, with the remainder in highly liquid low-risk instruments denominated in the reference currency.
• Article 55 requires an EMT issuer to notify a recovery plan and a redemption plan to its competent authority within six months of the offer. EBA technical standards add concentration limits on reserve deposits and a daily liquidity floor.
• Article 58 raises that floor to 60% for tokens designated significant, at which point supervision transfers to the European Banking Authority.

For a bank extending credit against stablecoin collateral, the ART reserve rules and the EMT safeguarding rules produce materially different insolvency analysis. Applying the wrong one is not a labelling error. It is a mispriced claim.

Three EU structures illustrate three different routes through the same rules. Circle took the electronic money institution route, obtaining an EMI licence from the ACPR effective 1 July 2024 and adding a crypto-asset service provider licence from the AMF in April 2026, so that Circle France both issues and provides custody and transfer services for the tokens it issues.

Société Générale-FORGE reached EMT compliance through the credit institution channel instead, issuing EURCV as an already-regulated bank subsidiary rather than seeking fresh EMI authorisation.

Paxos took the third route, establishing a dedicated Finnish issuer supervised by FIN-FSA, which means EU holders of USDG hold a claim against a different legal person from holders in Singapore.

A global bank holding the same commercial token in both jurisdictions therefore has two counterparties, two supervisors and two redemption paths for one line item. The MiCA white paper for each issuing entity sets out the issuer, applicable law, competent authority and redemption rights at a level of detail no ticker conveys, and reading the right one is the minimum diligence step. Whether an institution’s internal systems can represent that distinction at all is a question worth asking before the exposure exists rather than after.

The UK is the only one of the four where regulatory treatment escalates with adoption, and this is the most under-appreciated design feature in the current landscape.

The FCA regulates issuance, custody and admission to trading of UK-issued qualifying stablecoins, and published its final rules on 30 June 2026 under CP25/14. Where HM Treasury recognises a stablecoin arrangement as systemic under the Banking Act 2009, the Bank of England joins as co-regulator. The Bank has been explicit that its regime does not cover stablecoins used for buying and selling cryptoassets, which is the predominant use today, and that those remain solely with the FCA.

The Bank published its policy statement and draft Code of Practice on 22 June 2026, materially softening its November 2025 consultation. Per-user holding limits of GBP 20,000 for individuals and GBP 10 million for businesses were dropped and replaced by a temporary GBP 40 billion issuance guardrail per systemic coin, to be reviewed and eventually removed. . Consultation closes on 22 September 2026 and the Bank intends to finalise the Code by the end of 2026.

The joint Bank of England and FCA approach document followed on 30 June 2026, setting out how one issuer is supervised by two regulators. It defines timely convertibility for systemic arrangements as soon as possible, at a minimum by the end of day and ideally intraday. Firms must be FCA-authorised to issue a qualifying stablecoin from the UK from 25 October 2027; the FCA began accepting applications on 30 September 2026, and firms seeking authorisation in time for the deadline should apply by February 2027, allowing for a statutory assessment period of up to six months, or twelve where an application is judged incomplete.

No stablecoin has yet been recognised as systemic. That is precisely the point for institutional planning. An institution integrating a UK stablecoin today is integrating an asset whose supervisor, reserve composition, remuneration treatment and redemption obligations will change if the asset succeeds. Custody integrations, transaction monitoring rules and treasury policies are expensive to rebuild.

Singapore’s framework is deliberately narrower. MAS finalised its stablecoin regulatory framework on 15 August 2023. It applies to Singapore-dollar or G10 currency-backed stablecoins issued in Singapore. The framework requires issuers to hold reserves equal to 100% of the stablecoins in circulation, with monthly independent checks, an annual audit, and reserves held separately with approved custodians.

Redemption is at par within five business days. Issuers must hold minimum base capital and liquid assets sufficient for an orderly wind-down, and are barred from lending, staking or unrelated commercial activity, a ring-fence adopted in place of a full risk-based capital regime. Non-bank issuers with less than S$5 million in circulation fall outside the requirements. Only issuers meeting every condition may apply to have their stablecoins labelled MAS-regulated stablecoins. Stablecoins issued outside Singapore remain under the general digital payment token regime.

One qualification matters for anyone relying on that five-day window in a policy document. The framework was finalised as policy in 2023, but the amendments to the Payment Services Act that give it legal effect remain in progress. Until they are enacted, the redemption period is a supervisory expectation that issuers describe themselves as substantively meeting, not yet a statutory entitlement enforceable by a holder.

The narrowness is otherwise the feature. MAS is not attempting to regulate the global stablecoin market. It is making one category unambiguous, and issuers have used that clarity as an international base. Paxos structured USDG from Singapore before extending it into the EU, and states that USDG remains redeemable at par by all holders wherever they redeem, in accordance with the requirements of both MAS and the EU.

That sentence contains the whole cross-border problem. Par redemption is preserved commercially. The legal counterparty is not.

Two further regimes matter for any institution with Asian or Swiss operations, and both cut against the assumption that regulated means freely usable.

Hong Kong’s Stablecoins Ordinance took effect on 1 August 2025. On 10 April 2026 the HKMA granted the first two issuer licences, to Anchorpoint Financial Limited, a joint venture of Standard Chartered Bank (Hong Kong), HKT and Animoca Brands, and to The Hongkong and Shanghai Banking Corporation Limited (HSBC). The HKMA assessed 36 applications and licensed two, both note-issuing banks, an approval rate of about 6%. Both licences require issuance of Hong Kong dollar referenced stablecoins. The supply-side constraint is the story: a jurisdiction can create a rigorous regime and still produce almost no eligible assets, and an institution planning HKD stablecoin capability should plan around two counterparties rather than a market.

More consequential for institutional design is the transfer model. Under HKMA anti-money laundering expectations, licensed stablecoins are expected to move only between wallets whose owners have been identity-verified, with travel rule obligations applying above HK$8,000, which in practice means HKD stablecoins embed compliance checks restricting transfers to whitelisted addresses.

A permissioned-transfer stablecoin is a different operational asset from a freely transferable one. It is arguably a better one for a regulated institution, because counterparty screening happens at the protocol layer rather than in a downstream monitoring system. It is also not interchangeable with the open-transfer model around which every existing custody, treasury and reconciliation system was built, and reconciliation logic that assumes a transfer can always be initiated will need revisiting.

Switzerland reached a comparably strict position by a different route and is also updating its crypto regulatory framework. A 2025–26 Federal Council’s consultation on the Financial Institutions Act proposes replacing the 2018 fintech license with two new categories: payment institutions and crypto institutions. It would also remove the existing CHF 100 million cap.

In January 2026, FINMA also issued new guidance on crypto custody, covering areas such as asset segregation, key management and bankruptcy protection. It makes clear that Swiss institutions remain responsible for assets even when custody is outsourced.

Figure 5: Stablecoin Supply by Blockchain, August 2026

Source: DeFiLlama, AMINA Bank analysis. Data cut-off: 26 August 2026.

Supply is concentrated. Ethereum carries roughly half of all stablecoin supply and Tron close to 30%, together about 80% of the market, on DeFiLlama and Artemis data through 2026. Solana, BNB Chain, Hyperliquid, Base, Arbitrum and Polygon each hold low single-digit shares, and the entire remaining set of networks together holds less than Tron alone.

Activity is not concentrated in the same places. Solana overtook both Ethereum and Tron in adjusted monthly stablecoin transaction volume during the first quarter of 2026, reaching roughly $650 billion in February against a total of about $1.8 trillion across all chains on Allium data cited by Grayscale, a shift attributed to high-frequency, low-value payment flows. Tron continues to carry the majority of genuine real-economy payment flow, though its share has fallen as regulated volume moved onto Ethereum, Solana, BNB Chain and Polygon. Ethereum, meanwhile, retains the overwhelming majority of tokenised asset value.

Where stablecoin balances sit is not where stablecoins move. An institution that approves networks by supply ranking will be well configured for custody and poorly configured for payments. The two use cases point at different chains, which means network approval has to be made per use case rather than once.

This is why the operative unit is an asset-network pair rather than an asset. A bank may approve a token on Ethereum through its institutional custodian and decline the same token on a network its custodian does not support or its analytics provider does not screen. RLUSD, for example, now operates across seven supported networks, reaching several of them through third-party bridging rather than native issuance.

Native issuance and bridged representation are not the same credit. Against the native token the institution holds a direct claim on the issuer. Against a bridged representation it also holds exposure to bridge smart contracts and their operators, and a bridge failure can impair the position while the issuer remains solvent and fully reserved. The two should be approved separately, and the approval record should state which one the institution holds. This is not a marginal distinction: the BIS identified precisely this fragmentation, the same token living on separate ledgers with bridges between them, as the reason stablecoins fail its interoperability test.

Figure 6: The Institutional Stablecoin Stack

Source: AMINA Bank analysis.

Figure 6 shows why regulation cannot be assessed at the issuer alone. Prudential rules bind the issuer and reserve layer. Custody rules bind key control and client asset protection. AML, sanctions and travel rule obligations bind transfers. Market conduct rules bind liquidity venues. Payments regulation binds settlement. A stablecoin due diligence file is therefore a composite of asset, counterparty, custody, payments and technology diligence, and no single team inside a financial institution owns all five. Where an institution finds it difficult to name the owner of a given layer, that is usually where the control gap is.

Four regimes independently reached a similar conclusion: a payment stablecoin must not compete with a bank deposit. The GENIUS Act prohibits permitted issuers from paying interest or yield to holders. MiCA prohibits EMT and ART issuers from granting interest or any benefit linked to the length of the holding period. The Bank of England’s draft Code restricts remuneration under the systemic regime. MAS prohibits issuers from lending or staking reserves.

Reserve income did not disappear. On more than acked largely by short-term government paper, it is substantial. Since it cannot legally flow to the holder, it flows to whoever controls distribution, and the scale of that transfer is larger than most commentary allows.

Under a collaboration agreement effective 18 August 2023, Coinbase receives 100% of the reserve income generated on USDC held on its own platform and 50% of residual reserve income on USDC circulating elsewhere. Circle paid Coinbase approximately $908 million in 2024, around 54% of its revenue that year. Reserve income accounted for $2.637 billion of Circle’s $2.747 billion in total revenue for 2025, so the business remains overwhelmingly a reserve-income business with a distribution partner taking roughly half of it. Circle confirmed on its second-quarter 2026 earnings call that the agreement had renewed on unchanged terms.

The Global Dollar Network makes the same logic explicit as a design principle rather than a legacy arrangement. If issuers cannot buy holders with yield, they compete on the quality of the rail and on the economics they can offer distributors. Float becomes a lagging indicator. The leading indicators to consider may be how many regulated custodians support the exact token and network, how many jurisdictions recognise the issuing entity, how quickly redemption clears to a named bank, and how much of the reserve economics the issuer will share to win a distribution partner.

A conventional digital asset list records ticker, issuer and custody status. That is insufficient once the same commercial token is issued by different entities, on different networks, under different redemption arrangements.

The major issuers take visibly different routes through that list. Circle seems to have pursued authorisation in each perimeter it wants access to, accepting the cost of multiple licenses and a distribution arrangement that transfers roughly half its reserve income. Tether appears to have optimised for liquidity and retained economics, accepting exclusion from the EEA regulated perimeter as the price. None has yet produced a token that is fully portable across all four regimes without entity-level substitution, because the regimes do not permit it.

That constraint will shape the next phase. The leading institutional stablecoin is unlikely to be the one with the largest float. It is more likely to be the one that requires the fewest institutions to build a bespoke control framework around it.

Stablecoins have proven they could perhaps scale as digital assets. Whether they have proven they can scale as payment infrastructure is less clear than the volume statistics suggest, and the gap between gross transfer volume and real-economy payments is the single number most worth watching over the next two years.

The open question is whether they can scale as regulated financial infrastructure, and that depends on things the token does not control. The four regimes examined here have converged on principle and diverged on structure, which means a global institution cannot adopt one framework and apply it everywhere. It has to translate several sets of requirements into a single operating model while accepting that one commercial token may exist as several legal instruments, issued by several entities, on several networks, redeemable through several banks.

The correct object is the combination of issuing entity, token classification, contract address, network, custodian, screening coverage and fiat settlement path. Approving a ticker approves almost nothing.

End of day under the UK systemic regime, two business days under the OCC proposal with a stress extension to seven calendar days, and five business days under the MAS framework are different instruments, and they should be modelled separately and stress-tested at the extended window rather than the headline one.

The regulatory perimeter is still moving and moving unevenly. US implementing rules are proposed rather than final, and the OCC’s position on distribution economics would reshape the commercial model if adopted as drafted. The UK Code of Practice is expected to be finalised by the end of 2026, with FCA authorisation required from October 2027. Singapore’s implementing legislation is still in progress. Integrations built today should assume revision.

The market has established that digital dollars can move. What determines the next phase is whether the rail beneath it holds under supervision, across borders, at institutional size, on a bad day.

Q. What makes a stablecoin institutionally usable?

A stablecoin becomes institutionally usable when an entire route works, not just the token. The institution must be able to identify the issuing legal entity and its regulator, hold the specific token on a specific network with an approved custodian, screen transfers under its financial crime obligations, transfer to counterparties whose own policies accept the asset, and redeem into fiat through a named banking relationship inside a defined window. A failure at any stage makes the token unusable regardless of whether it holds its peg.

Q. How do the GENIUS Act, MiCA, the UK regime and the MAS framework differ for institutions?

They converge on full backing, segregation and enforceable redemption, and diverge on who may issue and how quickly redemption must settle. MiCA restricts single-currency stablecoin issuance to credit institutions and electronic money institutions. The GENIUS Act creates a dedicated permitted payment stablecoin issuer category. The UK escalates a stablecoin into Bank of England co-regulation once HM Treasury recognises it as systemic.

MAS operates a narrow label for single-currency stablecoins issued in Singapore. Redemption windows range from end of day for UK systemic arrangements, through two business days under the OCC’s proposal with a stress extension to seven calendar days, to five business days under the MAS framework.

Q. Is a stablecoin regulated in one jurisdiction automatically usable in another?

No. Authorisation in one jurisdiction does not establish eligibility in another. The same commercial token can be issued by different legal entities under different supervisors, as USDC is through Circle Internet Financial Europe SAS in the EEA and Circle Internet Financial, LLC elsewhere, and as USDG is through Paxos Issuance Europe Oy in the EU and Paxos Digital Singapore in Singapore. The institution’s redemption claim runs against whichever entity issued its particular holding. A token can also be authorised nowhere and still dominate globally, as USDT does, while being unavailable on licensed venues in the EEA.

Q. Why does the blockchain matter if the issuer is regulated?

The blockchain matters because regulatory permission and operational access are separate. The custodian must support the network, wallet infrastructure must sign and monitor on it, and analytics providers must screen it. Supply and activity also diverge: Ethereum and Tron hold roughly 80% of stablecoin supply, while Solana has led adjusted transaction volume since early 2026. Networks suited to custody are not necessarily suited to payments, so network approval should be made per use case.

Q. What is the difference between a natively issued and a bridged stablecoin?

A natively issued token is minted by the issuer on that network and carries a direct claim against the issuer. A bridged representation is created by a third-party protocol and adds exposure to bridge smart contracts and their operators. A bridge failure can impair the position even where the issuer remains solvent and fully reserved, so the two should be approved separately and recorded separately.

Q. Can institutions earn a return on stablecoin holdings?

Issuers are prohibited from paying interest to holders under both the GENIUS Act and MiCA, and the Bank of England restricts remuneration under its systemic regime. Reserve income instead flows to distribution partners under network arrangements; the largest documented example being Circle’s agreement with Coinbase. That route is now itself under regulatory scrutiny: the OCC’s proposed rule would create a rebuttable presumption against arrangements in which an affiliate or related third party pays yield to holders on an issuer’s behalf. Any resulting client-facing rewards depend on the specific arrangement, are not guaranteed, may change if the rule is finalised as drafted, and carry issuer, counterparty, custody and operational risk.

Disclaimer, Research and Educational Content

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